An accurate Scope of Work gives direction, timeline and purpose to renovation
PLAINFIELD, IL, JULY 16, 2020 – Renovating a hotel can be a daunting task, one fraught with financial risks. However, by carefully determining the Scope of Work, the sticky issues that might derail a renovation project can be addressed effectively and strategically before the first day of construction.
First off, what is a scope of work? A scope of work is a detailed document explaining exactly what is expected of a team completing a construction contract. It contains information that gives direction and purpose to every facet of a renovation—information hotel owners and contractors need to budget accurately. It will be referenced constantly for details concerning any and all parts of a project, from milestones to payment schedules, to unique requirements. Because of the valuable information in the scope, it is extremely important that it be created with the intent of being as accurate, crystal clear and thorough as it can be.
HOTEL RENOVATION SCOPE
If the hotel is flagged, the brand partner will provide a corporate-specific set of renovation guidelines, referred to as a Property Improvement Plan (PIP). A PIP and a scope of work are not the same thing. No matter how complete, PIP guidelines do not provide everything required for an accurate scope of work. PIPs give owners many variables and the leeway to negotiate things like finishes, surface materials and other elements on the basis of value engineering, as well as the renovation’s timelines, methods of execution, division of responsibilities, and reporting and payment schedules. In short, a PIP only outlines expected outcomes. It doesn’t provide the elements that must come together to get to those desired outcomes. That is the job of the scope.
On the other hand, if the hotel is independent, the designer will have greater freedom with the scope but may come under pressure from the owner to make alterations during construction both minor and major, a phenomenon sometimes referred to as “scope creep”. Changing the vision midway can result in serious cost overruns and time delays that the hotel can ill afford, whether branded or independent.
“In a poorly defined scope of work, there are always surprises. Most of these surprises could have been eliminated, or at least better managed, if the scope of work took them into account,” explained Sam Cicero, Jr., president of Cicero’s Development Corp., a General Contractor specializing in hospitality renovations. “For that reason, it is recommended that the owner do a complete survey of the property in the early stages of pre-construction, recruiting the help of third-party engineers or a general contractor. The survey will identify any problems and quantify the costs to fix them.”
Cicero said that analysis of the survey will uncover aspects of the project that require special considerations or instructions that must be incorporated into the scope of work, so that costly, last minute change orders are not needed in the field. Surveys are especially important if the property is an older building that needs to be brought up to current standards.
Every well-planned scope of work includes an accurate timeline for construction and deliveries. When you have an obligation to honor existing reservations, you cannot afford to have delays. In establishing a timeline, the hotel owner must decide whether the hotel will close down so that all renovation work can be completed as quickly as possible… or if the renovation work will be phased in on a floor-by-floor basis while the hotel stays in operation to maintain cash flow. This is a delicate balancing act: the longer a room is out of service, the more it costs the hotel’s bottom line.
“If the choice is to keep the hotel open the selection of a General Contractor takes on special importance,” notes Cicero. “Only a GC with extensive experience in hotel renovations will know how to work without interrupting business, maintaining safety and cleanliness, and most importantly, not annoy guests with undue noise and inconveniences.”
CREATING A SCOPE OF WORK
Below is a suggested if not simplified path towards avoiding the uncertainty, confusion, delays, and cost overruns notoriously produced by improperly defined or insufficient project scopes.
Start with a Workshop
Begin the process by getting the key sponsors and team members together by running a one-day workshop. Together, the attendees can identify what the requirements of the renovation are and what the ideal solution looks like. A workshop makes it much easier to set an over-aching vision for the renovation so that all stakeholders have a clear direction going forward in creating the scope of work.
Following the workshop, develop a first draft of the scope of work with a generic schedule that must be adhered to. In your schedule, include all high-level activities as well as any key tasks that are critical to success. Then add due dates to the activities and tasks so that you know roughly what must be completed and when. This is a high level roadmap, not a detailed project scope.
Break down what was agreed upon in the workshop into discrete deliverables based on the theory that when all of the deliverables have been produced, your renovation will be complete. Having well defined deliverables will help you manage the scope of the project, as well as introduce change control along the way.
Resources and Budget
Next, identify the resources and budget needed to produce the identified deliverables. List the people, equipment and materials required. Once identified, add the costs of these resources to calculate the renovation “budget”.
Reporting and Ownership
It’s critical the status of the project is clearly communicated in a timely fashion once it kicks off, so describe in detail how that will be done. Will you have regular team meetings? Customer presentations and status reports manually? Will you rely on using an online system for your reporting needs? Finally, list the key criteria for the project so that everyone knows how success will be measured once every phase of the project is complete. An effective project manager should be named to respond to potential issues prior to construction – and carefully monitor the project as it moves forward – to ensure that it is completed according to the scope’s specified quality, allocated resources, schedule, and budget.
Once the scope is defined, meet with stakeholders from the initial workshop to mutually agree on all details of the scope including addressing any existing conditions upfront. Now is the time to expand on details that will affect the execution of the contract. In a flagged hotel submit to the brand your scope, design documents, and other project initiatives. Procure brand approvals in advance of the renovation to help prevent wasted efforts and possible added expense. Neglecting to get agreements from all stakeholders can negatively impact the scope by placing undue pressure on manpower and resources, and add weeks or months to the schedule.